Rates Reverse—Lower!

Rates on U.S. mortgages fell this week, following four weeks of increases, according to Freddie Mac’s weekly survey of conforming mortgage rates, released on Thursday.

The 30-year fixed-rate mortgage averaged 4.8% for the week ending April 21, down from 4.91% last week and 5.07% a year ago, according to the survey.

“Low inflation is keeping mortgage rates at bay,” said Frank Nothaft, vice president and chief economist of Freddie Mac.

Rates on 15-year fixed-rate mortgages also dropped, averaging 4.02%, down from 4.13% last week and 4.39% a year ago.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.61%, down from 3.78% last week and 4.03% a year ago.

And the 1-year Treasury-indexed ARM averaged 3.16%, down from 3.25% last week and 4.22% a year ago.

To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point, while the ARMs required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

In closing – although housing starts and existing home sales in March were stronger than the market consensus, they were still at low levels. Moreover, home builders reportedly became more pessimistic in April about the near-term according to the NAHB/Wells Fargo Housing Market Index.

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